Question: we expect a project to pay $30000 at the end of each yr for 10 years. project requires we purchase an asset that costs $50000.

we expect a project to pay $30000 at the end of each yr for 10 years. project requires we purchase an asset that costs $50000. for tax purposes, the asset depreciated straight line over the 10 years. tax rate is 30%

factor for pv of an anniity for 10% 10 years is 6.145.

what is the pv of depreciation tax shield?

a. $30,735.00

b. $9217.50

c. $21,507.50

d. $39,942.50

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